Ohio 31-1458309
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No
Common Shares, $.01 Par Value, Outstanding as of July 31, 2000 - 10,892,784
PART I: FINANCIAL INFORMATION
Item 1 Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of June 30, 2000 and
December 31, 1999 ............................................................ 3
Condensed Consolidated Statements of Operations for the three months and
six months ended June 30, 2000 and 1999 ...................................... 4
Condensed Consolidated Statements of Cash Flows for the six months ended
June 30, 2000 and 1999 ....................................................... 5
Notes to Condensed Consolidated Financial Statements ......................... 6
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations .................................................... 8
Item 3 Quantitative and Qualitative Disclosures About Market Risk ...................11
PART II: OTHER INFORMATION
Items 1 through 6 ....................................................................12
Signatures .............................................................................14
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AIRNET SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands, except share data JUNE 30, DECEMBER 31,
2000 1999
------------------- ------------------
ASSETS (UNAUDITED)
Current assets:
Cash and cash equivalents $1,664 $1,667
Accounts receivable:
Trade, less allowances 16,261 14,919
Shareholders, affiliates, and associates 337 154
Inventory and spare parts 7,058 10,426
Taxes refundable 1,551 2,382
Deferred taxes 1,286 934
Deposits and prepaids 1,608 1,733
------------------- ------------------
Total current assets 29,765 32,215
Net property and equipment 83,739 84,733
Other assets:
Goodwill, net of accumulated amortization 7,746 7,920
Other intangibles, net of accumulated amortization 318 375
Investment in partnerships and other 1,967 2,234
------------------- ------------------
TOTAL ASSETS $123,535 $127,477
=================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,989 $5,203
Salaries and related liabilities 4,230 2,792
Accrued expenses 1,846 1,206
Deferred taxes 46 196
Current portion of notes payable 29 29
------------------- ------------------
Total current liabilities 11,140 9,426
Notes payable, less current portion 26,205 33,919
Deferred tax liability 11,398 10,381
Shareholders' equity:
Preferred shares, $.01 par value; 10,000,000 shares
authorized; and no shares issued and outstanding - -
Common shares, $.01 par value; 40,000,000 shares authorized;
and 12,753,000 shares issued at June 30, 2000
and December 31, 1999 128 128
Additional paid-in-capital 78,006 78,182
Retained earnings 18,548 15,207
Treasury shares, 1,870,000 and 1,343,000 shares held at cost
at June 30, 2000 and December 31, 1999, respectively (21,890) (19,766)
------------------- ------------------
Total shareholders' equity 74,792 73,751
------------------- ------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $123,535 $127,477
=================== ==================
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In thousands, except per share data
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999 2000 1999
--------------- --------------- -------------- --------------
NET REVENUES
Air transportation, net of excise tax
Bank delivery $25,825 $25,104 $50,905 $49,534
Express delivery 8,874 6,291 17,298 12,183
Fixed base and other operations 126 371 296 571
--------------- --------------- -------------- --------------
TOTAL NET REVENUES 34,825 31,766 68,499 62,288
COSTS AND EXPENSES
Air transportation 26,210 23,391 52,719 46,394
Fixed base operations 335 307 616 562
Selling, general and administrative 4,415 3,770 8,384 7,524
--------------- --------------- -------------- --------------
TOTAL COSTS AND EXPENSES 30,960 27,468 61,719 54,480
--------------- --------------- -------------- --------------
Income from operations 3,865 4,298 6,780 7,808
Interest expense 590 597 1,216 1,219
--------------- --------------- -------------- --------------
Income before income taxes 3,275 3,701 5,564 6,589
Provision for income taxes 1,309 1,517 2,224 2,691
--------------- --------------- -------------- --------------
INCOME BEFORE CUMULATIVE EFFECT OF A
CHANGE IN ACCOUNTING PRINCIPLE 1,966 2,184 3,340 3,898
Cumulative effect of writing off start-up
costs, net of tax - - - (2,488)
--------------- --------------- -------------- --------------
NET INCOME $1,966 $2,184 $3,340 $1,410
=============== =============== ============== ==============
Income per common share - basic and assuming dilution
Income before cumulative effect of a
change in accounting principle $0.18 $0.19 $0.30 $0.34
Cumulative effect of writing off
start-up costs - - - (0.22)
--------------- --------------- -------------- --------------
Net income $0.18 $0.19 $0.30 $0.12
=============== =============== ============== ==============
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See notes to condensed consolidated financial statements
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Unaudited
SIX MONTHS ENDED
In thousands JUNE 30,
2000 1999
--------------- --------------
OPERATING ACTIVITIES:
Net income $3,340 $1,410
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Cumulative effect of writing off start-up costs - 2,488
Depreciation 6,951 5,443
Amortization of intangibles 263 437
Deferred taxes 516 (721)
Provision for losses on accounts receivable 88 90
Loss on disposition of assets 80 22
Cash provided by (used in) operating assets and liabilities:
Accounts receivable (1,613) (3,729)
Inventory and spare parts 3,368 (1,146)
Prepaid expenses 125 410
Accounts payable (214) (878)
Accrued expenses 640 (2,159)
Taxes payable 831 2,689
Salaries and related liabilities 1,438 1,012
Other, net 250 82
--------------- --------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 16,063 5,450
INVESTING ACTIVITIES:
Purchases of property and equipment (6,049) (8,347)
Payments for covenants not to compete (15) (143)
Proceeds from sales of property and equipment 12 -
--------------- --------------
NET CASH USED IN INVESTING ACTIVITIES (6,052) (8,490)
FINANCING ACTIVITIES:
Proceeds from 1996 Incentive Stock Plan programs 119 135
Net borrowings (repayments) under the revolving credit facility (7,700) 3,400
Repayment of long-term debt (14) (13)
Purchase of treasury shares (2,419) -
--------------- --------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (10,014) 3,522
--------------- --------------
Net increase (decrease) in cash (3) 482
Cash and cash equivalents at beginning of period 1,667 1,142
--------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,664 $1,624
=============== ==============
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See notes to condensed consolidated financial statements
1. BASIS OF PRESENTATION
AirNet Systems, Inc. and its subsidiaries ("AirNet" or the "Company") operate a fully integrated national air transportation network which provides delivery service for time-critical shipments for customers in the U.S. banking industry and other industries requiring the express delivery of packages. AirNet also offers retail aviation fuel sales and related ground services for customers at its Columbus, Ohio facility.
The accompanying unaudited condensed consolidated financial statements include the accounts of AirNet Systems, Inc. and its subsidiaries. These financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. These financial statements should be read in conjunction with the year ended December 31, 1999 consolidated financial statements of AirNet Systems, Inc. included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (File No. 1-13025) (the "1999 Annual Report on Form 10-K") which contain additional disclosures including a summary of AirNet's accounting policies.
The financial information included herein reflects all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the results of interim periods. Certain prior period balances have been reclassified to conform with the current year presentation. Operating results for the six months ended June 30, 2000 are not necessarily indicative of the results to be expected for the year ending December 31, 2000.
The preparation of the condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in those financial statements and accompanying notes thereto. Actual results could differ from those estimates.
2. SEGMENT REPORTING
In 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 131, Disclosures about Segments of an Enterprise and Related Information, which established annual and interim reporting and disclosure standards for an enterprise's operating segments. SFAS No. 131 became effective for fiscal years beginning after December 15, 1997. The Company has historically not segregated costs between its Bank Delivery and Express Delivery operations. Prior to the quarter ended March 31, 2000, AirNet did not report segment information due to accounting system limitations. The Company modified its accounting systems and began reporting segment information on a going forward basis beginning with the quarter ended March 31, 2000, as restatement of prior periods is impracticable.
AirNet divides its business into two operating segments: Bank Delivery and Express Delivery. The Bank Delivery segment transports canceled checks and related information for the U.S. banking industry. The Express Delivery segment provides specialized, high priority delivery service for customers requiring late pick-ups and early deliveries combined with prompt, on-line delivery information.
The accounting policies used for each segment are described in Note 1 - Significant Accounting Policies of the Notes to Consolidated Financial Statements included in Item 8 of the 1999 Annual Report on Form 10-K. AirNet has no inter-segment sales. AirNet's assets are not allocated between segments due to significant overlap in usage of the aircraft fleet, vehicles and facilities. Management evaluates the performance of each segment based on operating income.
Summarized financial information concerning AirNet's reportable segments is shown in the following table for the three and six months ended June 30, 2000. The "Other" category includes AirNet's fixed base operations and income and expense not allocated to the reportable segments.
(in thousands) Three Months Ended Six Months Ended
June 30, 2000 June 30, 2000
------------------ ----------------
Net Revenues
Bank Delivery $25,825 $50,905
Express Delivery 8,874 17,298
Other 126 296
------------------ ---------------
Total 34,825 68,499
Income(loss) from operations
Bank Delivery 4,327 7,993
Express Delivery (317) (910)
Other (145) (303)
------------------ ---------------
Total $3,865 $6,780
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3. NET INCOME PER SHARE
The following table sets forth the computation of basic and diluted net income per common share (in thousands, except per share data):
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
------------ ------------- ------------ ------------
Numerator:
Income before the cumulative effect of a change
in accounting principle $ 1,966 $ 2,184 $ 3,340 $ 3,898
Net income 1,966 2,184 3,340 1,410
Denominator:
Basic - weighted average shares outstanding 11,068 11,393 11,239 11,388
Diluted
Stock options - associates, officers, and directors - 5 - 2
------------ ------------- ------------ ------------
Adjusted weighted average shares outstanding 11,068 11,398 11,239 11,390
Income per common share - basic and assuming dilution:
Income before the cumulative effect of a change
in accounting principle $ 0.18 $ 0.19 $ 0.30 $ 0.34
Net income $ 0.18 $ 0.19 $ 0.30 $ 0.12
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SAFE HARBOR STATEMENT
Except for the historical information contained in this Form 10-Q, the matters discussed, including, but not limited to, information regarding future economic performance and plans and objectives of AirNet's management, are forward-looking statements which involve risks and uncertainties. When used in this document, the words "anticipate", "estimate", "expect", "may", "plan", "project" and similar expressions are intended to be among statements that identify forward-looking statements. Such statements involve risks and uncertainties including, but not limited to, the following which could cause actual results to differ materially from any such forward-looking statement: potential regulatory changes by the Federal Aviation Administration ("FAA"), which could increase the regulation of AirNet's business, or the Federal Reserve, which could change the competitive environment of transporting canceled checks; adverse weather conditions; the ability to attract and retain qualified pilots; technological advances and increases in the use of electronic funds transfers; as well as other economic, competitive and domestic and foreign governmental factors affecting AirNet's markets, price and other facets of its operations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. AirNet undertakes no responsibility to update for changes related to these or any other factors that may hereafter occur. Refer to the 1999 Annual Report on Form 10-K for the fiscal year ended December 31, 1999, for additional detail relating to risk factors expressed in forward-looking statements.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999
Net revenues were $34.8 million for the three months ended June 30, 2000, an increase of $3.1 million, or 9.6%, over the same period of 1999. Revenues from Bank Delivery increased $0.7 million, or 2.9%. The increase in Bank Delivery revenues is primarily the result of rate increases effective January 1, 2000. Express Delivery revenues increased $2.6 million, or 41.1%. Within the Express Delivery segment, revenues from premium and ground transportation services increased $2.3 million due to the addition of new customers requiring time-sensitive deliveries of just-in-time parts and medical products. In addition, price increases to most customers were implemented on January 1, 2000. Revenues from Mercury Business Services ("Mercury") accounted for $0.4 million of the increase. These increases were offset by decreases in wholesale and standard service revenues of approximately $0.1 million.
Total costs and expenses were $31.0 million for the three months ended June 30, 2000, an increase of $3.5 million, or 12.7%, over the same period in 1999, resulting in income from operations of $3.9 million for the three months ended June 30, 2000, compared to $4.3 million for the same period of 1999, or a 10.1% decrease.
Air transportation expenses were up $2.8 million, or 12.1%, for the three month period compared to the same period in 1999. Approximately $0.9 million of the increase in transportation costs, including ground courier costs, operational wages and related benefits, and commercial air freight cost, can be directly attributed to the addition of sales contracts entered into in the third quarter of 1999. Fuel costs increased $0.6 million but were offset by income from the fuel surcharge program. Maintenance costs were up $0.2 million due to increased labor and parts costs. Depreciation expense increased $0.7 million due to aircraft additions and improvements. Wages and benefits expense increased $0.7 million due to increased pilot wages and the addition of an incentive compensation plan in January 2000 which aligns personnel goals with AirNet's financial performance. An increase of $0.2 million relates to the use of outside charter operators due to a lack of pilots and the cost-effectiveness for chartering certain routes. Costs associated with shipping packages with the commercial airlines increased due to increased volumes associated with Mercury and SDX (shipments via the commercial airlines) growth. Other operational costs increased as a result of the increase in Express Delivery volumes.
Selling, general and administrative expense increased $0.6 million, or 17.1%, over the same period in the prior year primarily due to the addition of the new incentive compensation plan in January 2000 to align personnel goals with AirNet's financial performance and commissions on increased Express sales.
Interest expense was $0.6 million for the three months ended June 30, 2000, which is comparable to the interest expense for the three months ended June 30, 1999, as the notes payable balance was slightly lower but interest rates increased in 2000.
SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999
Revenues were $68.5 million for the six months ended June 30, 2000, an increase of $6.2 million, or 10.0%, over the same period of 1999. Revenues from Bank Delivery increased $1.4 million, or 2.8%. The increase in Bank Delivery revenues is primarily the result of rate increases effective January 1, 2000. Express Delivery revenues increased $5.1 million, or 42.0%. Increased revenues from Mercury accounted for $0.6 million of the increase. Revenues from AirNet's premium and ground transportation services increased $5.0 million due to the addition of new customers requiring time-sensitive deliveries of just-in-time parts and medical products. In addition, price increases to most customers were implemented on January 1, 2000. These Express Delivery increases were offset by decreases in standard, wholesale, and other service revenues. Fixed base and other operations decreased $0.3 million compared to the prior year primarily due to a $0.1 million loss on the sale of an aircraft in 2000 compared to a $0.2 million gain on the sale of an aircraft in the same period of 1999.
Total costs and expenses were $61.7 million for the six months ended June 30, 2000, an increase of $7.2 million, or 13.3%, over the same period in 1999 resulting in income from operations of $6.8 million for the six months ended June 30, 2000 compared to $7.8 million for the same period of 1999. In the prior year, AirNet adopted the provisions of the SOP 98-5, Reporting on the Costs of Start-Up Activities, as of January 1, 1999. The effect of the adoption of SOP 98-5 was to record a charge for the cumulative effect of a change in accounting principle of $2.5 million for the 1999 period, net of taxes of $1.7 million ($0.22 per common share), to expense costs that had been capitalized prior to 1999.
Air transportation expenses were up $6.3 million, or 13.6%. Approximately $2.0 million of the increase in transportation costs, including ground courier costs, operational wages and related benefits, and commercial air freight cost, can be directly attributed to the addition of sales contracts entered into in the third quarter of 1999. Fuel costs increased by $1.6 million due to higher aviation fuel prices and an increase in flight hours. However, the increase in these costs were partially offset by income of $1.2 million from the fuel surcharge program. Maintenance costs are up $0.4 million primarily due to increased labor and parts costs. Depreciation expense is up $1.5 million due to aircraft additions and improvements which occurred during 1999. Wages and benefits expense increased $1.5 million due to increased pilot wages and the addition of the 2000 incentive compensation plan. An increase of $0.5 million relates to the use of outside charter operators due to a lack of pilots and the cost-effectiveness of chartering certain routes. Crew training expense increased $0.3 million due to outsourced flight simulator training beginning in late 1999. Insurance expense decreased approximately $ 0.5 million due to premium reductions and improved claims management in the aircraft, air cargo and workers compensation areas. Other operational costs increased as a result of the increase in Express Delivery volumes.
Selling, general and administrative expenses increased $0.9 million, or 11.4%, for the six month period. Of the increase in selling, general and administrative expense, $0.7 million can be attributed to the 2000 incentive compensation plan. Commissions expense increased $0.2 million due to the growth in Express Delivery segment. In addition, amortization expense is down $0.2 million due to the expiration of certain non-compete covenants in the third quarter of 1999.
Interest expense was $1.2 million for the six months ended June 30, 2000, which is comparable to the interest expense for the six months ended June 30, 1999, as the notes payable balance was slightly lower but interest rates increased slightly from year to year.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW FROM OPERATING ACTIVITIES. Net cash provided by operating activities was $16.1 million for the six months ended June 30, 2000, compared to $5.4 million for the same period in 1999. The increase is partly the result of proceeds associated with the sale of an aircraft in 2000 which was purchased in 1999 for resale purposes.
CURRENT CREDIT ARRANGEMENTS. AirNet maintains a credit agreement with a bank that provides a $50.0 million unsecured revolving credit facility. The credit agreement limits the availability of funds to designated percentages of accounts receivable, inventory and the wholesale value of aircraft and equipment. In addition, the credit agreement requires the maintenance of minimum net worth and cash flow levels, imposes limits on payments of dividends to 50% of net income and restricts the amount of additional debt which may be incurred. AirNet's outstanding balance at June 30, 2000 was $26.2 million, which is a $7.7 million decrease from the balance at December 31, 1999.
In September 1999, AirNet entered into two interest rate swap agreements with a bank as a hedge against the interest rate risk associated with borrowings. The swap agreements each have a notional amount of $5.0 million and effectively lock in a portion of AirNet's variable rate revolving credit liability at fixed rates of 6.3% and 6.5% plus a margin based on AirNet's funded debt ratio. These swap agreements are in effect for a period of three years ending in September 2002. The differential to be paid or received is accrued as interest rates change and is recognized as an adjustment to interest expense in the statements of operations. AirNet does not use derivative financial instruments for speculative purposes.
INVESTING ACTIVITIES. Capital expenditures totaled $6.0 million for six months ended June 30, 2000 compared to $8.3 million for the same period in 1999. Substantially all of the 2000 expenditures were incurred for aircraft inspections, major engine overhauls and related flight equipment. AirNet anticipates it will have approximately $16.0 million in total capital expenditures in 2000. AirNet anticipates it will continue to acquire aircraft and flight equipment as necessary to maintain growth and continue offering quality service to its customers.
STOCK REPURCHASE PROGRAM. AirNet announced a stock repurchase program in February 2000 allowing AirNet to purchase up to $3.0 million of its common shares. Management and the Board of Directors believe that AirNet's common shares represent an excellent value and an appropriate investment. Purchases of these common shares will be made over time in the open market or through privately negotiated transactions. In the first half of 2000, AirNet repurchased 547,400 common shares for approximately $2.4 million.
AirNet anticipates that operating cash and capital expenditure requirements will continue to be funded by cash flow from operations, cash on hand and bank borrowings.
SEASONALITY AND VARIABILITY IN QUARTERLY RESULTS
AirNet's operations historically have been somewhat seasonal and somewhat dependent on the number of banking holidays falling during the week. Because financial institutions are currently AirNet's principal customers, AirNet's air system is scheduled primarily around the needs of financial institution customers. When financial institutions are closed, there is no need for AirNet to operate a full system. AirNet's fiscal quarter ending December 31, is often the most impacted by bank holidays (including Thanksgiving and Christmas) recognized by its primary customers. When these holidays fall on Monday through Thursday, AirNet's revenue and net income are adversely affected. AirNet's annual results fluctuate as well.
Operating results are also affected by the weather. AirNet generally experiences higher maintenance costs during its fiscal quarter ending March 31. Winter weather often requires additional costs for de-icing, hangar rental and other aircraft services.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
INFLATION AND INTEREST RATES
AirNet is exposed to certain market risks from transactions that are entered into during the normal course of business. AirNet's primary market risk exposure relates to interest rate risk. At June 30, 2000, AirNet had a balance of $26.2 million on its revolving credit facility. This facility bears interest at AirNet's option, at a fixed rate determined by the Eurodollar rate, a negotiated rate or a floating rate. Based on borrowings at June 30, 2000, a one hundred basis point change in interest rates would impact net interest expense by approximately $262,000 per year. In September 1999, AirNet entered into two interest rate swap agreements with a bank as a hedge against the interest rate risk associated with borrowings. The swap agreements each have a notional amount of $5.0 million and effectively lock in a portion of AirNet's variable rate revolving credit liability at fixed rates of 6.3% and 6.5% plus a margin based on AirNet's funded debt ratio. These swap agreements contain a three year term which expires in September 2002.
Item 1. Legal Proceedings.
On April 6, 2000, AirNet filed an action in the United States District Court for the District of Maryland seeking to recover on a $0.5 million debt owned to it by Continental Courier Systems, Inc. for overnight couriers services performed.
On April 27, 2000, Continental answered AirNet's complaint, denying any indebtedness to AirNet and asserting several counterclaims, including violations of the federal antitrust laws and state law claims of fraud and tortious competition. Continental is seeking up to $0.8 million on each claim and is seeking treble damages on the antitrust claims. AirNet believes that Continental's counterclaims are without merit, has filed a motion to dismiss all of the counterclaims and intends to vigorously defend against them. However, at this time, we do not believe it is feasible to predict the outcome of either AirNet's claims nor Continental's counterclaims. The timing of the final resolution is also uncertain.
Item 2. Changes in Securities and Use of Proceeds. Not Applicable
Item 3. Defaults Upon Senior Securities. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The Annual Meeting of Shareholders (the "Annual Meeting") of AirNet Systems, Inc. (the "Company") was held on May 12, 2000. The number of common shares of the Company outstanding and entitled to vote at the Annual Meeting was 11,393,362. The number of Common Shares represented in person or by proxy at the Annual Meeting was 10,179,144.
(b) Directors elected at the Annual Meeting:
Gerald G. Mercer For: 10,144,132 Withheld: 35,012 Broker non-vote: -0- Joel E. Biggerstaff For: 10,145,188 Withheld: 33,956 Broker non-vote: -0- Roger D. Blackwell For: 10,008,898 Withheld: 170,246 Broker non-vote: -0- Russell M. Gertmenian For: 10,027,241 Withheld: 151,903 Broker non-vote: -0- J. F. Keeler, Jr. For: 10,146,199 Withheld: 32,945 Broker non-vote: -0- David P. Lauer For: 10,145,379 Withheld: 33,765 Broker non-vote: -0- James E. Riddle For: 10,145,192 Withheld: 33,952 Broker non-vote: -0- |
(c) See Item 4(b) for voting results for directors.
Proposal to amend Section 1.10 of AirNet's Code of Regulations to permit shareholders to appoint proxies by any method permitted by Ohio law.
For: 10,155,761
Against: 16,033
Abstentions: 7,350
(d) Not applicable.
Item 5. Other Information. Not Applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
EXHIBIT NO. DESCRIPTION
----------- -------------------------------------------
3.1 Certificate regarding adoption of amendment
to Section 1.10 of the Code of Regulations
of AirNet Systems, Inc. by the shareholders
on May 12, 2000.
3.2 Code of Regulations of AirNet Systems, Inc.
(reflecting amendments through May 12,
2000). [for SEC reporting compliance
purposes only]
27 Financial Data Schedule
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(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the three months ended June 30, 2000.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: August 8, 2000 By: /s/ William R. Sumser
-----------------------------------
William R. Sumser,
Chief Financial Officer
(Duly Authorized Officer)
(Principal Financial Officer)
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Exhibit No. Description
3.1 Certificate regarding adoption of amendment to Section 1.10 of
the Code of Regulations of AirNet Systems, Inc. by the
shareholders on May 12, 2000. Filed herewith.
3.2 Code of Regulations of AirNet Systems, Inc. (reflecting
amendments through May 12, 2000). [for SEC reporting
compliance purposes only]. Filed herewith.
27 Financial Data Schedule. Filed herewith.
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The undersigned hereby certifies that he is the duly elected, qualified and acting Secretary of AirNet Systems, Inc. (the "Company"); and that the resolution set forth below was duly adopted by the shareholders of the Company at the 2000 Annual Meeting of Shareholders duly called and held on May 12, 2000:
RESOLVED, that the amendment to Section 1.10 of the AirNet Code of Regulations, in the form set forth in the Company's Proxy Statement delivered to shareholders in connection with this meeting [and set forth below], be adopted.
SECTION 1.10. PROXIES. At meetings of the shareholders, any shareholder of record entitled to vote thereat may be represented and may vote by proxy or proxies appointed by an instrument in writing signed by such shareholder or appointed in any other manner permitted by Ohio law. Any such instrument in writing or record of any such appointment shall be filed with or received by the secretary of the meeting before the person holding such proxy shall be allowed to vote thereunder. No appointment of a proxy is valid after the expiration of eleven months after it is made unless the writing or other communication which appoints such proxy specifies the date on which it is to expire or the length of time it is to continue in force.
IN WITNESS WHEREOF, the undersigned has signed this Certificate this 7th day of August, 2000.
/s/ William R. Sumser ---------------------------------- William R. Sumser, Secretary |
INDEX
ARTICLE ONE
MEETINGS OF SHAREHOLDERS
Section 1.01. Annual Meetings...............................................1
Section 1.02. Calling of Meetings...........................................1
Section 1.03. Place of Meetings.............................................1
Section 1.04. Notice of Meetings............................................1
Section 1.05. Waiver of Notice..............................................2
Section 1.06. Quorum........................................................3
Section 1.07. Votes Required................................................3
Section 1.08. Order of Business.............................................3
Section 1.09. Shareholders Entitled to Vote.................................3
Section 1.10. Proxies.......................................................3
Section 1.11. Inspectors of Election........................................3
ARTICLE TWO
DIRECTORS
Section 2.01. Authority and Qualifications..................................4
Section 2.02. Number of Directors and Term of Office........................4
Section 2.03. Election......................................................4
Section 2.04. Nominations...................................................5
Section 2.05. Removal.......................................................5
Section 2.06. Vacancies.....................................................6
Section 2.07. Meetings......................................................6
Section 2.08. Notice of Meetings............................................6
Section 2.09. Waiver of Notice..............................................7
Section 2.10. Quorum........................................................7
Section 2.11. Executive Committee...........................................7
Section 2.12. Compensation..................................................7
Section 2.13. By-Laws.......................................................8
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ARTICLE THREE
OFFICERS
Section 3.01. Officers......................................................8
Section 3.02. Tenure of Office..............................................8
Section 3.03. Duties of the Chairman of the Board...........................8
Section 3.04. Duties of the President.......................................8
Section 3.05. Duties of the Vice Presidents.................................8
Section 3.06. Duties of the Secretary.......................................9
Section 3.07. Duties of the Treasurer.......................................9
ARTICLE FOUR
SHARES
Section 4.01. Certificates..................................................9
Section 4.02. Transfers....................................................10
Section 4.03. Transfer Agents and Registrars...............................10
Section 4.04. Lost, Wrongfully Taken or Destroyed Certificates.............10
Section 4.05. Uncertificated Shares........................................11
ARTICLE FIVE
INDEMNIFICATION AND INSURANCE
Section 5.01. Mandatory Indemnification....................................11
Section 5.02. Court-Approved Indemnification...............................11
Section 5.03. Indemnification for Expenses.................................12
Section 5.04. Determination Required.......................................12
Section 5.05. Advances for Expenses........................................13
Section 5.06. Article FIVE Not Exclusive...................................13
Section 5.07. Insurance....................................................14
Section 5.08. Certain Definitions..........................................14
Section 5.09. Venue........................................................15
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Section 6.01. Amendments...................................................15 Section 6.02. Action by Shareholders or Directors Without a Meeting........15 |
SECTION 1.01. ANNUAL MEETINGS. The annual meeting of the shareholders for the election of directors, for the consideration of reports to be laid before such meeting and for the transaction of such other business as may properly come before such meeting, shall be held on the fourth Monday in January in each year or on such other date as may be fixed from time to time by the directors.
SECTION 1.02. CALLING OF MEETINGS. Meetings of the shareholders may be called only by the chairman of the board, the president, or, in case of the president's absence, death, or disability, the vice president authorized to exercise the authority of the president; the secretary; the directors by action at a meeting, or a majority of the directors acting without a meeting; or the holders of at least fifty percent (50%) of all shares outstanding and entitled to vote thereat.
SECTION 1.03. PLACE OF MEETINGS. All meetings of shareholders shall be held at the principal office of the corporation, unless otherwise provided by action of the directors. Meetings of shareholders may be held at any place within or without the State of Ohio.
SECTION 1.04. NOTICE OF MEETINGS.
(A) Written notice stating the time, place and purposes of a meeting of the shareholders shall be given either by personal delivery or by mail not less than seven nor more than sixty days before the date of the meeting, (1) to each shareholder of record entitled to notice of the meeting, (2) by or at the direction of the president or the secretary. If mailed, such notice shall be addressed to the shareholder at his address as it appears on the records of the corporation. Notice of adjournment of a meeting need not be given if the time and place to which it is adjourned are fixed and announced at such meeting. In the event of a transfer of shares after the record date for determining the shareholders who are entitled to receive notice of a meeting of shareholders, it shall not be necessary to give notice to the transferee. Nothing herein contained shall prevent the setting of a record date in the manner provided by law, the Articles or the Regulations for the determination of shareholders who are entitled to receive notice of or to vote at any meeting of shareholders or for any purpose required or permitted by law.
(B) Following receipt by the president or the secretary of a request in writing, specifying the purpose or purposes for which the persons properly making such request have called a meeting of the shareholders, delivered either in person or by registered mail to such officer by any persons entitled to call a meeting of shareholders, such officer shall cause to be given to the shareholders entitled thereto notice of a meeting to be held on a date not less than seven nor more than sixty days after the receipt of such request, as such officer may fix. If such notice is not given within fifteen days after the receipt of such request by the president or the secretary, then, and only then, the persons properly calling the meeting may fix the time of meeting and give notice thereof in accordance with the provisions of the Regulations.
(C) A shareholder seeking to bring business before an annual meeting of the shareholders shall provide written notice thereof to the Secretary of the corporation, stating his intent and the subject of business. Such notice shall be personally delivered to, or mailed by United States mail, postage prepaid, and received at, the principal executive offices of the corporation not less than sixty, nor more than ninety days, prior to the date of the annual meeting. If, however, notice or public disclosure of the date of the annual meeting is given or made less than seventy days prior to the annual meeting, then written notice by the shareholder must be received by the Secretary of the corporation no later than the close of business on the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. Notwithstanding the provisions of this Division (C) of Section 1.04, a shareholder's proposal shall be considered timely submitted to the corporation if it is submitted in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended, or any successor rule or regulation. The chairman of the annual meeting may refuse to acknowledge the proposal of any person to bring business before the annual meeting not made in compliance with the foregoing procedure and applicable federal securities laws.
SECTION 1.05. WAIVER OF NOTICE. Notice of the time, place and purpose or purposes of any meeting of shareholders may be waived in writing, either before or after the holding of such meeting, by any shareholders, which writing shall be filed with or entered upon the records of such meeting. The attendance of any shareholder, in person or by proxy, at any such meeting without protesting the lack of proper notice, prior to or at the commencement of the meeting, shall be deemed to be a waiver by such shareholder of notice of such meeting.
SECTION 1.06. QUORUM. At any meeting of shareholders, the holders of a majority of the voting shares of the corporation then outstanding and entitled to vote thereat, present in person or by proxy, shall constitute a quorum for such meeting. The holders of a majority of the voting shares represented at a meeting, whether or not a quorum is present, or the chairman of the board, the president, or the officer of the corporation acting as chairman of the meeting, may adjourn such meeting from time to time, and if a quorum is present at such adjourned meeting any business may be transacted as if the meeting had been held as originally called.
SECTION 1.07. VOTES REQUIRED. At all elections of directors the candidates receiving the greatest number of votes shall be elected. Any other matter submitted to the shareholders for their vote shall be decided by the vote of such proportion of the shares, or of any class of shares, or of each class, as is required by law, the Articles or the Regulations.
SECTION 1.08. ORDER OF BUSINESS. The order of business at any meeting of shareholders shall be determined by the officer of the corporation acting as chairman of such meeting unless otherwise determined by a vote of the holders of a majority of the voting shares of the corporation then outstanding, present in person or by proxy, and entitled to vote at such meeting.
SECTION 1.09. SHAREHOLDERS ENTITLED TO VOTE. Each shareholder of record on the books of the corporation on the record date for determining the shareholders who are entitled to vote at a meeting of shareholders shall be entitled at such meeting to one vote for each share of the corporation standing in his name on the books of the corporation on such record date. The directors may fix a record date for the determination of the shareholders who are entitled to receive notice of and to vote at a meeting of shareholders, which record date shall not be a date earlier than the date on which the record date is fixed and which record date may be a maximum of sixty days preceding the date of the meeting of shareholders.
SECTION 1.10. PROXIES. At meetings of the shareholders, any shareholder of record entitled to vote thereat may be represented and may vote by proxy or proxies appointed by an instrument in writing signed by such shareholder or appointed in any other manner permitted by Ohio law. Any such instrument in writing or record of any such appointment shall be filed with or received by the secretary of the meeting before the person holding such proxy shall be allowed to vote thereunder. No appointment of a proxy is valid after the expiration of eleven months after it is made unless the writing or other communication which appoints such proxy specifies the date on which it is to expire or the length of time it is to continue in force.
SECTION 1.11. INSPECTORS OF ELECTION. In advance of any meeting of shareholders, the directors may appoint inspectors of election to act at such meeting or any adjournment thereof; if inspectors are not so appointed, the officer of the corporation acting as chairman of any such meeting may make such appointment. In case any person appointed as inspector fails to appear or act, the vacancy may be filled only by appointment made by the directors in advance of such meeting or, if not so filled, at the meeting by the officer of the corporation acting as chairman of such meeting. No other person or persons may appoint or require the appointment of inspectors of election.
SECTION 2.01. AUTHORITY AND QUALIFICATIONS. Except where the law, the Articles or the Regulations otherwise provide, all authority of the corporation shall be vested in and exercised by its directors. Directors need not be shareholders of the corporation.
SECTION 2.02. NUMBER OF DIRECTORS AND TERM OF OFFICE.
(A) Until changed in accordance with the provisions of these Regulations, the number of directors of the corporation shall be three. Each director shall be elected to serve until the next annual meeting of shareholders and his or her successor is duly elected and qualified or until his or her earlier resignation, removal from office, or death.
(B) The number of directors may be fixed or changed at a meeting of the shareholders called for the purpose of electing directors at which a quorum is present, only by the affirmative vote of the holders of not less than a majority of the voting shares which are represented at the meeting, in person or by proxy, and entitled to vote on such proposal.
(C) The directors may fix or change the number of directors and may fill any director's office that is created by an increase in the number of directors; provided, however, that the directors may not increase the number of directors to more than nine nor reduce the number of directors to less than three.
(D) No reduction in the number of directors shall of itself have the effect of shortening the term of any incumbent director.
SECTION 2.03. ELECTION. At each annual meeting of the shareholders for the election of directors, the successors to the directors whose term shall expire in that year shall be elected, but if the annual meeting is not held or if one or more of such directors are not elected thereat, they may be elected at a special meeting called for that purpose. The election of directors shall be by ballot whenever requested by the presiding officer of the meeting or by the holders of a majority of the voting shares outstanding, entitled to vote at such meeting and present in person or by proxy, but unless such request is made, the election shall be viva voce.
SECTION 2.04. NOMINATIONS. Nominations for the election of directors may be made by the board of directors of the corporation or a committee by the board or by any shareholder entitled to vote in the election of directors generally. However, any shareholders entitled to vote in the election of directors generally may nominate one or more persons for election as directors at a meeting only if written notice of such shareholder's intent to make such nomination or nominations has been given to the Secretary of the corporation. Such notice shall be personally delivered to, or mailed by United States mail, postage prepaid, and received at, the principal executive offices of the corporation not less than sixty, nor more than ninety days, prior to the date of the meeting at which such election is to occur. If, however, notice or public disclosure of the date of the meeting is given or made less than seventy days prior to the meeting, then written notice by the shareholder must be received by the Secretary of the corporation not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Each such notice shall set forth: (A) the name and address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (B) a representation that the shareholder is a holder of record of shares of the corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (C) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (D) such other information regarding each nominee proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had the nominee been nominated, or intended to be nominated, by the board of directors of the corporation; and (E) the consent of each nominee to serve as a director of the corporation if so elected. The chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure.
SECTION 2.05. REMOVAL. A director or directors may be removed from office only for cause and only by the vote of the holders of shares entitling them to exercise not less than a majority of the voting power of the corporation to elect directors in place of those to be removed. In case of any removal, a new director may be elected at the same meeting for the unexpired term of each director removed. Failure to elect a director to fill the unexpired term of any director removed shall be deemed to create a vacancy in the board.
SECTION 2.06. VACANCIES. The remaining directors, though less than a majority of the whole authorized number of directors, may, by the vote of a majority of their number, fill any vacancy in the board for the unexpired term. A vacancy in the board exists within the meaning of this Section 2.06 in case the shareholders increase the authorized number of directors but fail at the meeting at which such increase is authorized, or an adjournment thereof, to elect the additional directors provided for, or in case the shareholders fail at any time to elect the whole authorized number of directors.
SECTION 2.07. MEETINGS. A meeting of the directors shall be held immediately following the adjournment of each annual meeting of shareholders at which directors are elected, and notice of such meeting need not be given. The directors shall hold such other meetings as may from time to time be called, and such other meetings of directors may be called only by the chairman of the board, the president, or any two directors. All meetings of directors shall be held at the principal office of the corporation in Columbus, Ohio or at such other place within or without the State of Ohio, as the directors may from time to time determine by a resolution. Meetings of the directors may be held through any communications equipment if all persons participating can hear each other and participation in a meeting pursuant to this provision shall constitute presence at such meeting.
SECTION 2.08. NOTICE OF MEETINGS. Notice of the time and place of each meeting of directors for which such notice is required by law, the Articles, the Regulations or the By-Laws shall be given to each of the directors by at least one of the following methods:
(A) In a writing mailed not less than three days before such meeting and addressed to the residence or usual place of business of a director, as such address appears on the records of the corporation; or
(B) By telegraph, cable, radio, wireless, or a writing sent or delivered to the residence or usual place of business of a director as the same appears on the records of the corporation, not later than the day before the date on which such meeting is to be held; or
(C) Personally or by telephone not later than the day before the date on which such meeting is to be held.
Notice given to a director by any one of the methods specified in the Regulations shall be sufficient, and the method of giving notice to all directors need not be uniform. Notice of any meeting of directors may be given only by the chairman of the board, the president or the secretary of the corporation. Any such notice need not specify the purpose or purposes of the meeting. Notice of adjournment of a meeting of directors need not be given if the time and place to which it is adjourned are fixed and announced at such meeting.
SECTION 2.09. WAIVER OF NOTICE. Notice of any meeting of directors may be waived in writing, either before or after the holding of such meeting, by any director, which writing shall be filed with or entered upon the records of the meeting. The attendance of any director at any meeting of directors without protesting, prior to or at the commencement of the meeting, the lack of proper notice, shall be deemed to be a waiver by him of notice of such meeting.
SECTION 2.10. QUORUM. A majority of the whole authorized number of directors shall be necessary to constitute a quorum for a meeting of directors, except that a majority of the directors in office shall constitute a quorum for filling a vacancy in the board. The act of a majority of the directors present at a meeting at which a quorum is present is the act of the board, except as otherwise provided by law, the Articles or the Regulations.
SECTION 2.11. EXECUTIVE COMMITTEE. The directors may create an executive committee or any other committee of directors, to consist of not less than three directors, and may authorize the delegation to such executive committee or other committees of any of the authority of the directors, however conferred, other than that of filling vacancies among the directors or in the executive committee or in any other committee of the directors.
Such executive committee or any other committee of directors shall serve at the pleasure of the directors, shall act only in the intervals between meetings of the directors, and shall be subject to the control and direction of the directors. Such executive committee or other committee of directors may act by a majority of its members at a meeting or by a writing or writings signed by all of its members.
Any act or authorization of any act by the executive committee or any other committee within the authority delegated to it shall be as effective for all purposes as the act or authorization of the directors. No notice of a meeting of the executive committee or of any other committee of directors shall be required. A meeting of the executive committee or of any other committee of directors may be called only by the president or by a member of such executive or other committee of directors. Meetings of the executive committee or of any other committee of directors may be held through any communications equipment if all persons participating can hear each other and participation in such a meeting shall constitute presence thereat.
SECTION 2.12. COMPENSATION. Directors shall be entitled to receive as compensation for services rendered and expenses incurred as directors, such amounts as the directors may determine.
SECTION 2.13. BY-LAWS. The directors may adopt, and amend from time to time, By-Laws for their own government, which By-Laws shall not be inconsistent with the law, the Articles or the Regulations.
SECTION 3.01. OFFICERS. The officers of the corporation to be elected by the directors shall be a president, a secretary, a treasurer, and, if desired, one or more vice presidents and such other officers and assistant officers as the directors may from time to time elect. The directors may elect a chairman of the board, who must be a director. Officers need not be shareholders of the corporation, and may be paid such compensation as the board of directors may determine. Any two or more offices may be held by the same person, but no officer shall execute, acknowledge, or verify any instrument in more than one capacity if such instrument is required by law, the Articles, the Regulations or the By-Laws to be executed, acknowledged, or verified by two or more officers.
SECTION 3.02. TENURE OF OFFICE. The officers of the corporation hold office at the pleasure of the directors. Any officer of the corporation may be removed, either with or without cause, at any time, by the affirmative vote of a majority of all the directors then in office; such removal, however, shall be without prejudice to the contract rights, if any, of the person so removed.
SECTION 3.03. DUTIES OF THE CHAIRMAN OF THE BOARD. The chairman of the board, if any, shall preside at all meetings of the directors. He shall have such other powers and duties as the directors shall from time to time assign to him.
SECTION 3.04. DUTIES OF THE PRESIDENT. The president shall be the chief executive officer of the corporation and shall exercise supervision over the business of the corporation and shall have, among such additional powers and duties as the directors may from time to time assign to him, the power and authority to sign all certificates evidencing shares of the corporation and all deeds, mortgages, bonds, contracts, notes and other instruments requiring the signature of the president of the corporation. It shall be the duty of the president to preside at all meetings of shareholders.
SECTION 3.05. DUTIES OF THE VICE PRESIDENTS. In the absence of the president or in the event of his inability or refusal to act, the vice president, if any (or in the event there be more than one vice president, the vice presidents in the order designated, or in the absence of any designation, then in the order of their election), shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all restrictions upon the president. The vice presidents shall perform such other duties and have such other powers as the directors may from time to time prescribe.
SECTION 3.06. DUTIES OF THE SECRETARY. It shall be the duty of the secretary, or of an assistant secretary, if any, in case of the absence or inability to act of the secretary, to keep minutes of all the proceedings of the shareholders and the directors and to make a proper record of the same; to perform such other duties as may be required by law, the Articles or the Regulations; to perform such other and further duties as may from time to time be assigned to him by the directors or the president; and to deliver all books, paper and property of the corporation in his possession to his successor, or to the president.
SECTION 3.07. DUTIES OF THE TREASURER. The treasurer, or an assistant treasurer, if any, in case of the absence or inability to act of the treasurer, shall receive and safely keep in charge all money, bills, notes, choses in action, securities and similar property belonging to the corporation, and shall do with or disburse the same as directed by the president or the directors; shall keep an accurate account of the finances and business of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, stated capital and shares, together with such other accounts as may be required and hold the same open for inspection and examination by the directors; shall give bond in such sum with such security as the directors may require for the faithful performance of his duties; shall, upon the expiration of his term of office, deliver all money and other property of the corporation in his possession or custody to his successor or the president; and shall perform such other duties as from time to time may be assigned to him by the directors.
SECTION 4.01. CERTIFICATES. Certificates evidencing ownership of shares of the corporation shall be issued to those entitled to them. Each certificate evidencing shares of the corporation shall bear a distinguishing number; the signatures of the chairman of the board, the president, or a vice president, and of the secretary or an assistant secretary (except that when any such certificate is countersigned by an incorporated transfer agent or registrar, such signatures may be facsimile, engraved, stamped or printed); and such recitals as may be required by law. Certificates evidencing shares of the corporation shall be of such tenor and design as the directors may from time to time adopt and may bear such recitals as are permitted by law.
SECTION 4.02. TRANSFERS. Where a certificate evidencing a share or shares of the corporation is presented to the corporation or its proper agents with a request to register transfer, the transfer shall be registered as requested if:
(A) An appropriate person signs on each certificate so presented or signs on a separate document an assignment or transfer of shares evidenced by each such certificate, or signs a power to assign or transfer such shares, or when the signature of an appropriate person is written without more on the back of each such certificate; and
(B) Reasonable assurance is given that the indorsement of each appropriate person is genuine and effective; the corporation or its agents may refuse to register a transfer of shares unless the signature of each appropriate person is guaranteed by a commercial bank or trust company having an office or a correspondent in the City of New York or by a firm having membership in the New York Stock Exchange; and
(C) All applicable laws relating to the collection of transfer or other taxes have been complied with; and
(D) The corporation or its agents are not otherwise required or permitted to refuse to register such transfer.
SECTION 4.03. TRANSFER AGENTS AND REGISTRARS. The directors may appoint one or more agents to transfer or to register shares of the corporation, or both.
SECTION 4.04. LOST, WRONGFULLY TAKEN OR DESTROYED CERTIFICATES. Except as otherwise provided by law, where the owner of a certificate evidencing shares of the corporation claims that such certificate has been lost, destroyed or wrongfully taken, the directors must cause the corporation to issue a new certificate in place of the original certificate if the owner:
(A) So requests before the corporation has notice that such original certificate has been acquired by a bona fide purchaser; and
(B) Files with the corporation, unless waived by the directors, an indemnity bond, with surety or sureties satisfactory to the corporation, in such sums as the directors may, in their discretion, deem reasonably sufficient as indemnity against any loss or liability that the corporation may incur by reason of the issuance of each such new certificate; and
(C) Satisfies any other reasonable requirements which may be imposed by the directors, in their discretion.
SECTION 4.05. UNCERTIFICATED SHARES. Anything contained in this Article FOUR to the contrary notwithstanding, the directors may provide by resolution that some or all of any or all classes and series of shares of the corporation shall be uncertificated shares, provided that such resolution shall not apply to (A) shares of the corporation represented by a certificate until such certificate is surrendered to the corporation in accordance with applicable provisions of Ohio law or (B) any certificated security of the corporation issued in exchange for an uncertificated security in accordance with applicable provisions of Ohio law. The rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of certificates representing shares of the same class and series shall be identical, except as otherwise expressly provided by law.
SECTION 5.01. MANDATORY INDEMNIFICATION. The corporation shall indemnify any officer or director of the corporation who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including, without limitation, any action threatened or instituted by or in the right of the corporation), by reason of the fact that he is or was a director, officer, manager or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager or agent of another corporation (domestic or foreign, nonprofit or for profit), limited liability company, partnership, joint venture, trust or other enterprise, against expenses (including, without limitation, attorneys' fees, filing fees, court reporters' fees and transcript costs), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, he had no reasonable cause to believe his conduct was unlawful. A person claiming indemnification under this Section 5.01 shall be presumed, in respect of any act or omission giving rise to such claim for indemnification, to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal matter, to have had no reasonable cause to believe his conduct was unlawful and the termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, rebut such presumption.
SECTION 5.02. COURT-APPROVED INDEMNIFICATION. Anything contained in the Regulations or elsewhere to the contrary notwithstanding:
(A) the corporation shall not indemnify any officer or director of the corporation who was a party to any completed action or suit instituted by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager or agent of another corporation (domestic or foreign, nonprofit or for profit), limited liability company, partnership, joint venture, trust or other enterprise, in respect of any claim, issue or matter asserted in such action or suit as to which he shall have been adjudged to be liable for acting with reckless disregard for the best interests of the corporation or misconduct (other than negligence) in the performance of his duty to the corporation unless and only to the extent that the Court of Common Pleas of Franklin County, Ohio or the court in which such action or suit was brought shall determine upon application that, despite such adjudication of liability, and in view of all the circumstances of the case, he is fairly and reasonably entitled to such indemnity as such Court of Common Pleas or such other court shall deem proper; and
(B) the corporation shall promptly make any such unpaid
indemnification as is determined by a court to be proper as contemplated by this
Section 5.02.
SECTION 5.03. INDEMNIFICATION FOR EXPENSES. Anything contained
in the Regulations or elsewhere to the contrary notwithstanding, to the extent
that an officer or director of the corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in Section
5.01, or in defense of any claim, issue or matter therein, he shall be promptly
indemnified by the corporation against expenses (including, without limitation,
attorneys' fees, filing fees, court reporters' fees and transcript costs)
actually and reasonably incurred by him in connection therewith.
SECTION 5.04. DETERMINATION REQUIRED. Any indemnification required under Section 5.01 and not precluded under Section 5.02 shall be made by the corporation only upon a determination that such indemnification of the officer or director is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 5.01. Such determination may be made only (A) by a majority vote of a quorum consisting of directors of the corporation who were not and are not parties to, or threatened with, any such action, suit or proceeding, or (B) if such a quorum is not obtainable or if a majority of a quorum of disinterested directors so directs, in a written opinion by independent legal counsel other than an attorney, or a firm having associated with it an attorney, who has been retained by or who has performed services for the corporation, or any person to be indemnified, within the past five years, or (C) by the shareholders, or (D) by the Court of Common Pleas of Franklin County, Ohio or (if the corporation is a party thereto) the court in which such action, suit or proceeding was brought, if any; any such determination may be made by a court under division (D) of this Section 5.04 at any time [including, without limitation, any time before, during or after the time when any such determination may be requested of, be under consideration by or have been denied or disregarded by the disinterested directors under division (A) or by independent legal counsel under division (B) or by the shareholders under division (C) of this Section 5.04]; and no failure for any reason to make any such determination, and no decision for any reason to deny any such determination, by the disinterested directors under division (A) or by independent legal counsel under division (B) or by shareholders under division (C) of this Section 5.04 shall be evidence in rebuttal of the presumption recited in Section 5.01. Any determination made by the disinterested directors under division (A) or by independent legal counsel under division (B) of this Section 5.04 to make indemnification in respect of any claim, issue or matter asserted in an action or suit threatened or brought by or in the right of the corporation shall be promptly communicated to the person who threatened or brought such action or suit, and within ten (10) days after receipt of such notification such person shall have the right to petition the Court of Common Pleas of Franklin County, Ohio or the court in which such action or suit was brought, if any, to review the reasonableness of such determination.
SECTION 5.05. ADVANCES FOR EXPENSES. Expenses (including, without limitation, attorneys' fees, filing fees, court reporters' fees and transcript costs) incurred in defending any action, suit or proceeding referred to in Section 5.01 shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding to or on behalf of the officer or director promptly as such expenses are incurred by him, but only if such officer or director shall first agree, in writing, to repay all amounts so paid in respect of any claim, issue or other matter asserted in such action, suit or proceeding in defense of which he shall not have been successful on the merits or otherwise:
(A) if it shall ultimately be determined as provided in Section 5.04 that he is not entitled to be indemnified by the corporation as provided under Section 5.01; or
(B) if, in respect of any claim, issue or other matter asserted by or in the right of the corporation in such action or suit, he shall have been adjudged to be liable for acting with reckless disregard for the best interests of the corporation or misconduct (other than negligence) in the performance of his duty to the corporation, unless and only to the extent that the Court of Common Pleas of Franklin County, Ohio or the court in which such action or suit was brought shall determine upon application that, despite such adjudication of liability, and in view of all the circumstances, he is fairly and reasonably entitled to all or part of such indemnification.
SECTION 5.06. ARTICLE FIVE NOT EXCLUSIVE. The indemnification provided by this Article FIVE shall not be exclusive of, and shall be in addition to, any other rights to which any person seeking indemnification may be entitled under the Articles, the Regulations, any agreement, a vote of shareholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be an officer or director of the corporation and shall inure to the benefit of the heirs, executors, and administrators of such a person.
SECTION 5.07. INSURANCE. The corporation may purchase and maintain insurance or furnish similar protection, including but not limited to trust funds, letters of credit, or self-insurance, on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, or agent of another corporation (domestic or foreign, nonprofit or for profit), partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the obligation or the power to indemnify him against such liability under the provisions of this Article FIVE. Insurance may be purchased from or maintained with a person in which the corporation has a financial interest.
SECTION 5.08. CERTAIN DEFINITIONS. For purposes of this Article FIVE, and as examples and not by way of limitation:
(A) A person claiming indemnification under this Article FIVE shall be deemed to have been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 5.01, or in defense of any claim, issue or other matter therein, if such action, suit or proceeding shall be terminated as to such person, with or without prejudice, without the entry of a judgment or order against him, without a conviction of him, without the imposition of a fine upon him and without his payment or agreement to pay any amount in settlement thereof (whether or not any such termination is based upon a judicial or other determination of the lack of merit of the claims made against him or otherwise results in a vindication of him); and
(B) References to an "other enterprise" shall include employee benefit plans; references to a "fine" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" within the meaning of that term as used in this Article FIVE.
SECTION 5.09. VENUE. Any action, suit or proceeding to determine a claim for indemnification under this Article FIVE may be maintained by the person claiming such indemnification, or by the corporation, in the Court of Common Pleas of Franklin County, Ohio. The corporation and (by claiming such indemnification) each such person consent to the exercise of jurisdiction over its or his person by the Court of Common Pleas of Franklin County, Ohio in any such action, suit or proceeding.
SECTION 6.01. AMENDMENTS.
(A) The Regulations may be amended, or new regulations may be adopted, at a meeting of the shareholders held for such purpose, only by the affirmative vote of the holders of shares entitling them to exercise not less than a majority of the voting power of the corporation on such proposal.
(B) Division (A) of this Section 6.01 notwithstanding, the
shareholders shall have no right to (1) amend or repeal, in any respect, Section
2.05, Article FIVE, this Division (B) of Section 6.01 or Division (B) of Section
6.02 of these Regulations; or (2) adopt, amend or repeal any other provision
which would modify or circumvent Section 2.05, Article FIVE, this Division (B)
of Section 6.01 or Division (B) of Section 6.02 of these Regulations, unless,
in each case, the holders of not less than sixty-six and two-thirds percent
(66 2/3%) of the total voting power of the corporation shall have voted in favor
of such action.
SECTION 6.02. ACTION BY SHAREHOLDERS OR DIRECTORS WITHOUT A MEETING.
(A) Anything contained in the Regulations to the contrary notwithstanding, except as provided in Division (B) of this Section 6.02, any action which may be authorized or taken at a meeting of the shareholders or of the directors or of a committee of the directors, as the case may be, may be authorized or taken without a meeting with the affirmative vote or approval of, and in a writing or writings signed by, all the shareholders who would be entitled to notice of a meeting of the shareholders held for such purpose, or all the directors, or all the members of such committee of the directors, respectively, which writings shall be filed with or entered upon the records of the corporation.
(B) Notwithstanding the provisions of Division (A) of this Section 6.02, from and after the date of the closing of the initial public offering of the common shares of the corporation registered pursuant to the Securities Act of 1933, as amended, the Regulations may be amended, or new regulations adopted, by the shareholders only at a meeting of the shareholders held for such purpose.
ARTICLE 5
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AIRNET
SYSTEMS INC.'S QUARTERLY REPORT ON FORM 10-Q FOR THE SIX MONTHS ENDED
JUNE 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
MULTIPLIER: 1,000
PERIOD TYPE
6 MOS
FISCAL YEAR END
DEC 31 2000
PERIOD START
JAN 01 2000
PERIOD END
JUN 30 2000
CASH
1,664
SECURITIES
0
RECEIVABLES
17,098
ALLOWANCES
500
INVENTORY
7,058
CURRENT ASSETS
29,765
PP&E
156,826
DEPRECIATION
73,087
TOTAL ASSETS
123,535
CURRENT LIABILITIES
11,140
BONDS
0
PREFERRED MANDATORY
0
PREFERRED
0
COMMON
128
OTHER SE
74,664
TOTAL LIABILITY AND EQUITY
123,535
SALES
296
TOTAL REVENUES
68,499
CGS
616
TOTAL COSTS
53,335
OTHER EXPENSES
8,384
LOSS PROVISION
0
INTEREST EXPENSE
1,216
INCOME PRETAX
5,564
INCOME TAX
2,224
INCOME CONTINUING
3,340
DISCONTINUED
0
EXTRAORDINARY
0
CHANGES
0
NET INCOME
3,340
EPS BASIC
.30
EPS DILUTED
.30